The major objectives are to characterize the "hairpin" catalytic RNA which we have discovered. This catalytic RNA is the catalytic enter of the negative strand of the satellite RNA from tobacco ringspot virus (Hampel and Tritz, Biochemistry in press, 1989). The 14 base substrate RNA is cleaved at the arrow by the second molecule, the 50 base catalytic RNA. Reaction conditions are near physiological. Properties of the reaction at 37 degrees C, 12 mM MgCl2, 2mM spermidine and 40 mM Tris pH 7.5 are Km=0.03 muM and kcat=2.1/min. Mutagenesis studies will be done in this proposal to confirm the proposed helical regions, the proposed loops and to further characterize the structure. Large scale synthesis of RNA will be carried out for NMR and X-ray crystallographic studies. The reaction will be optimized with respect to base sequence, target sequence length and free energy of the catalytic RNA/substrate RNA helices. Mutagenesis studies done to date have confirmed the two helices between the catalytic RNA and substrate RNA. These mutagenesis studies showed we could cleave any substrate as long as we maintained the base pairs between the substrate RNA and catalytic RNA. The only requirement for substrate RNA sequence was the GUC. The catalytic RNA can be engineered to cleave any target substrate which has a GUC. This engineering is simply to design it so that the base pairs in the two helical regions are maintained. This proposal will develop methodologies to cleave specific target sites which are part of larger RNA in vivo.